The decision this week by Tokyo-based industrial conglomerate Marubeni to step away from any future role in developing coal-fired power plants is a signature moment that almost certainly signals that “other industrial behemoths will follow,” according to an assessment by the Institute for Energy Economics and Financial Analysis (IEEFA).

Marubeni, until now one of the world’s biggest coal plant developers, announced as a “general principle” that it “will no longer enter into any new coal-fired power projects,” IEEFA reports. The announcement “recognizes climate risk as a threat to Marubeni’s business and shareholders and states that—as a result—the company will begin the process of pulling out of coal-fired power generation, with a target to halve its coal-fired power capacity by 2030.”

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The company is also setting out to double the share of renewable energy in its generation mix, to 20%, by 2023. IEEFA takes credit for recommended precisely that decision in a report it issued in July, adding that Marubeni’s decision will trigger “intense boardroom discussions” for Asian giants like steelmaker POSCO and the Korea Electric Power Corporation (KEPCO), both based in South Korea.

“Marubeni rather vaguely states that it might consider participating in ultra-supercritical coal projects in rare cases going forward, but its new policy rules out further development of some of its current projects due to the use of outdated supercritical and subcritical technology,” IEEFA states. And “even new projects designed to use ultra-supercritical coal power, like the Cirebon expansion in Indonesia, have now been thrown into jeopardy with Marubeni’s move.”

A decisive factor, adds IEEFA energy finance analyst Simon Nicholas, is the growing prominence of renewable energy alternatives. Those power sources “are already at grid parity or are cheaper than new ultra-supercritical coal-fired power, they can come online five times faster, they have 100% emission reductions relative to ‘clean coal,’ they conform to Paris Agreement carbon dioxide commitments, and they can get financing—unlike new coal-fired power plants.”

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